Executive Summary: Key Legal and Evidentiary Issues

• The applicant was denied three COVID-19 benefits by the CRA based on failure to meet income eligibility thresholds.

• The main dispute centered on whether Airbnb income constituted self-employment income or rental income.

• CRA Guidelines were used to determine the classification of income based on the extent of services provided.

• The Federal Court applied the reasonableness standard of review under the Vavilov framework.

• Procedural fairness arguments were raised but dismissed as unsupported or non-determinative.

• Judicial review was denied as the CRA's decisions were found to be reasonable and procedurally fair.

Facts and outcome of the case

Vitali Tcherkas applied for three federal COVID-19 financial support programs: the Canada Emergency Response Benefit (CERB), the Canada Recovery Benefit (CRB), and the Canada Worker Lockdown Benefit (CWLB). These programs provided temporary income support to workers affected by the pandemic, conditional on earning at least $5,000 in prior employment or self-employment income, and stopping work due to COVID-19.

Mr. Tcherkas earned income by renting a portion of his family home through Airbnb. He initially received the benefits but was later reassessed by the Canada Revenue Agency (CRA), which concluded he was ineligible because his Airbnb income was considered rental income, not self-employment income. He contested this in a judicial review before the Federal Court, arguing both that the CRA’s classification of his income was incorrect and that the CRA process violated his procedural fairness rights.

The Federal Court dismissed Mr. Tcherkas’ application. The Court found that the CRA’s decision to treat his Airbnb income as rental income was reasonable. It emphasized that CRA Guidelines permit classification of Airbnb income as self-employment only when substantial “additional services” (like meals, tours, or in-stay cleaning) are provided. The evidence showed that Mr. Tcherkas primarily provided basic services such as cleaning and property maintenance between guests, which did not meet the threshold for business activity under the guidelines.

On procedural fairness, the Court rejected Mr. Tcherkas’ allegations. It held that he never requested language accommodation, set his own documentation deadline, and was informed of the grounds on which eligibility would be assessed. The Court concluded that the CRA followed a fair process and reasonably applied the law to the facts.

As a result, the judicial review was dismissed and no costs were awarded, in accordance with the parties’ agreement.